Why gold will always win against paper money ?
How the monetary system works is not hidden from us. Its mechanisms are visible, but its complexity that we do not understand how it works. As of today, the world was diverted from what is really called for money to benefit the currency. Explanation in this article.
Wealth is never destroyed. It is simply transferred, and that particularly in times of crisis. By understanding the state of our current economy and the workings of the financial world, it is then possible to side or transfer of wealth will occur.
Read also : Peter Munk PDG of Barrick Gold, how gold has saved his life and made him rich.
That’s why Orobel is here to explain you everything, in order to change this crisis into an opportunity for you !
1 – People don’t make the difference between currency and money.
A money and a currency have the same features. Except for one detail !
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Money is… |
Currency is… |
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A medium of exchange A unit of account Portable Durable Divisible Fungible (A dollars in my pocket buys the same amount as a dollars in your pocket.)
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A medium of exchange A unit of account Portable Durable Divisible Fungible (A dollars in my pocket buys the same amount as a dollars in your pocket.) + A Store of Value |
A currency is so in addition to all these features a store of value for a long time. But now, governments today can print more. They create their own hands their own stores of value.
Somehow, your wealth is constantly transferred from your pocket / bank account to the banking system and thus the government.
And it is because of their properties as gold and silver are the optimal form of money !
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Gold is… |
|
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A meaning of exchange… A unit of account… Portable… Durable… Divisible… Fongible… |
… Because you can store a large amount of value in a small amount of metal. … Because its price is expressed in multiple currencies. … Because the coins are small size. … Because it does not corrode and does not oxidize. … A kilo of gold can be changed in several coins or small bars. … Pure gold is the same all over the planet. |
+ A Store of Value |
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2 – None currency have survived in the history.
It existed in the history of mankind thousands and thousands of fiduciary currency. All saw their value dropped to zero.
The term fiduciary refers to the fact that by official decree established by a government, one currency can exist. This currency is printed in giant print on rolls of paper on which we shall stamp, giving it its rightful nature of fiat money.
The dollar, for example lost 95% of its purchasing power since the creation of the US Federal Reserve in 1913.
3 – We can’t print gold.
Gold is the ultimate currency form as seen previously because it is divisible, permanent, is a store of value and above all … you can not create or print it.
Read also : Gold Demand Trend of Central Banks on 2nd quarter 2015.
Read also : who really create money ?
4 – Inflation is actually a decrease of a currency’s purchasing power.
We define inflation as an expansion of the currency supply, driving up consumer prices.
Now imagine a pool representing the currency supply. Are placed in this pool sponge representing consumer prices.
If you enlarge the pool size (So if more tickets are printed), sponge (the consumer price) too must grow to absorb the surplus.
The price of goods and products you are buying increases not because the products change. This is actually the currency that buys less and less, and thus loses its value !
In 1992, George Soros has enriched even more by betting on the decline of the pound sterling.
In every crisis there is a transfer of wealth and some even richer by standing on the right side.
Like them, put you on the safe side of the fence. This is the time to invest in gold!
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